No. A014/05
For release - November 7, 2005
Transport Minister Jean-C. Lapierre today announced that he has approved a new toll structure for the Confederation Bridge that had been proposed by the bridge operator, Strait Crossing Bridge Limited (SCBL).
"SCBL submitted the new toll structure for my approval following extensive consultation with stakeholders," said Mr. Lapierre. "I have decided to approve this new toll structure as the majority of stakeholders believed this would have a very positive impact on tourism and the bus industry, will not impact the majority of traffic travelling by car, and will maintain fairness for the trucking industry."
One of the fundamental changes in the revised toll structure is the implementation of a per axle toll for all vehicles. Essentially, the new toll structure calls for a base fee of $39.50 for the first 2 axles and $6.50 per additional axle. As a result, tolls for automobiles, which represent 75% of the traffic on the bridge, will remain unchanged. However, rates will be reduced from $226 to $39.50 for 2-axle buses, and from $226 to $46 for 3-axle buses. While rates will rise slightly for 5-axle and 6-axle trucks, they will fall for 4-axle trucks as well as for trucks hauling double trailers. Towed vehicles (for example a tent-trailer being towed by a car) will also be charged according to the total number of axles.
The new axle-based toll structure is consistent with other bridge and highway toll structures across North America, which for the most part charge a fee based on the number of axles. An axle count system recognizes that, generally speaking, a vehicle with a higher number of axles will exert more weight on the road surface, which in turn translates into more maintenance costs for the infrastructure. Axle count is considered the most independent and objective method of calculating weight increments without actually weighing all vehicles.
"An axle-based system is not only more logical and equitable for motorists and the transportation industry, but is also simpler for all users to understand," said Mr. Lapierre.
The initial toll structure for the Confederation Bridge established in 1997 was based on the previous ferry rates. These ferry rates had been established based not only on the weight and the space occupied by a vehicle on the ferry, but also on the seating and on-board services requirements for passengers. The bus industry in particular has argued that it was irrelevant and unfair to base toll rates for a bridge on factors that had been used for setting past ferry rates. The current toll structure had been identified as a disincentive to the development of the bus industry, including motor coach tour operations, an important component of the PEI tourism industry.
Another important change in the toll structure is the introduction of a round-trip fee of $4 and $8 respectively for pedestrians and cyclists. These rates will remain fixed for the next five years and will not be adjusted for inflation over this period. The Bridge Operator has also committed to provide an improved and more frequent shuttle service for pedestrians and cyclists.
"It is reasonable to expect that pedestrians and cyclists should pay a fair fee for using the shuttle service across the Confederation Bridge," said Mr. Lapierre. "The new tolls for pedestrians and cyclists are fair, especially when considering they will benefit from improved and more frequent shuttle service."
The new toll structure is revenue neutral for the bridge operator. In other words, based on the 2004 traffic volume and composition (number of cars, trucks, buses etc. that crossed the bridge), the total revenues the bridge operator would have collected remains substantially the same whether the new toll structure or the current toll rates were being used. This principle respects the 1993 Bridge Operating Agreement (BOA) between the operator and the Government of Canada.
The new toll structure will be implemented on January 1, 2006. The Bridge Operator will also simultaneously adjust the tolls for inflation (75 percent of the increase in the Consumer Price Index as calculated by Statistics Canada) as provided by the Bridge Operating Agreement.
A backgrounder providing additional information on tolls for the Confederation Bridge is attached.
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Contacts:
Irène MarcheterreDirector of CommunicationsOffice of the Ministerof Transport, Ottawa(613) 991-0700
Maurice LandryCommunications, Moncton(506) 851-7562
Transport Canada is online at www.tc.gc.ca. Subscribe to news releases and speeches at www.tc.gc.ca/e-news and keep up-to-date on the latest from Transport Canada.
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BACKGROUNDER
TOLL STRUCTURE FOR THE CONFEDERATION BRIDGE
In 1993, Strait Crossing Development Inc. (SCDI) signed agreements with the Government of Canada to finance, design and construct a bridge across the Northumberland Strait between New Brunswick and Prince Edward Island. As part of these agreements, SCDI, as the developer, also agreed to operate the Confederation Bridge for a period of 35 years. Over this 35-year period, the Bridge Operator has the right to collect tolls, which are considered an essential element to the financial sustainability of the project.
The Confederation Bridge toll rates and structure are governed by the Bridge Operating Agreement, one of the agreements signed between SCDI and the Government of Canada in 1993. The Agreement provides the developer considerable flexibility in proposing a toll structure and rates, which must be approved by the Minister of Transport.
Strait Crossing Bridge Limited (SCBL) operates the bridge on behalf of its parent company, SCDI.
As required by the Agreement, the initial toll structure and rates for the Confederation Bridge that were approved in 1997 were based on the 1992 Marine Atlantic Ferry revenues for the Borden-Cape Tormentine ferry run. Given the same volume and type of traffic that actually crossed on the ferries in 1992, and after taking inflation into account, the toll rates were to generate substantially the same level of revenues.
The toll structure and rates that were implemented in 1997 were, for the majority of users, lower than the ferry rates that the Bridge was replacing.
Under the Bridge Operating Agreement, SCDI is entitled to adjust toll rates for inflation every January 1st by an amount not to exceed three-quarters (75%) of the increase in the Consumer Price Index (CPI) over the previous calendar year. The bridge operator must make a request for this adjustment to inflation that is then reviewed by Transport Canada to ensure that the calculations are in accordance with the Bridge Operating Agreement. The purpose of limiting the increase to 75% of inflation was to allow the tolls to gradually decrease in real value over the 35-year period.
The Bridge Operator may also apply to change the toll structure i.e. the vehicle groupings or classes that the toll rates are being applied to. Revenue neutrality is one of the main criteria that must be met before such a request is considered for approval. In other words, based on the traffic volume and composition (number of cars, trucks, buses etc. that crossed the bridge) over the previous calendar year, the total revenues the bridge operator would collect under the proposed new toll structure would remain the same whether the new proposed toll structure or the current toll rates were being used.
Appendix A
Comparative Rates of Current Versus New Toll Structuresfor Confederation Bridge
Class of vehicle
2005 Rates ($)
New Toll Structure Rates(if applied in 2005) **
Differencein dollars
PercentageIncrease/Decrease
New Toll StructureRates OnceAdjusted To Inflation forJanuary 1, 2006 *
Auto
39.50
39.50
---
0%
$40.50
Recreational Vehicle (2 axles)
45.25
39.50
-5.75
-12.7%
$40.50
Van
45.25
39.50
-5.75
-12.7%
$40.50
Motorcycles
15.75
15.75
---
0%
$16.25
Buses (2 axles)
226.00
39.50
-186.50
-82.5%
$40.50
Buses (3 axles)
226.00
46.00
-180.00
-79.6%
$47.25
Strait trucks (2 axles)
45.25
39.50
-5.75
-12.7%
40.50
Strait trucks (3 axles)
45.25
46.00
+0.75
+1.7%
$47.25
Tractor trailers (4 axles)
56.50
52.50
-4.00
-7.1%
$54.00
Tractor trailers (5 axles)
56.50
59.00
+2.50
+4.4%
$60.75
Tractor trailers (6 axles)
56.50
65.50
+9.00
+15.9%
$67.50
Tractor trailers (7 axles)
56.50
72.00
+15.50
+27.4%
$74.25
Tractor trailers (double trailer)
113.00
88.50
-24.50
-21.7%
$91.25
Cyclist***
8.00
+8.00
$8.00
Pedestrian***
4.00
+4.00
$4.00
* New toll structure rates if applied in 2005 plus ¾ or 75% of CPI inflation.** Any towed vehicle would be charged $6.50 per axle***The rates for cyclists and pedestrians will not change for a period of five years.
